U.S. Stocks Decline as Trump Prepares to Announce Tariffs
U.S. stocks closed lower on Wednesday, breaking a three-day winning streak. Investors pulled back as they anticipated President Donald Trump’s long-awaited announcement regarding tariffs on auto imports.
Market Performance Overview
The Dow Jones Industrial Average (DJI) decreased by 0.3%, a loss of 132.71 points, bringing the index to 42,454.79 points.
The S&P 500 fell by 1.1%, losing 64.45 points to close at 5,712.20 points. The consumer discretionary and tech sectors struggled the most; however, consumer staples demonstrated gains.
Specifically, the Consumer Staples Select Sector SPDR (XLP) increased by 1.6%, while the Consumer Discretionary Select Sector SPDR (XLY) dropped by 1.3%. Technology stocks faced the heaviest decline, as indicated by the Technology Select Sector SPDR (XLK) falling 2.2%. Only five sectors of the S&P 500 ended in the green.
The tech-focused Nasdaq Composite index dropped 2%, equating to 372.84 points and concluding at 17,899.01 points. Moreover, the CBOE Volatility Index (VIX), often referred to as the fear gauge, rose by 6.88% to reach 18.33. On Wednesday, 15.5 billion shares were exchanged, which is less than the 20-session average of 16.2 billion.
Tariff News Affects Market Sentiment
Concerns about a trade war resurfaced on Wall Street after the White House indicated that President Trump is set to announce tariffs on automotive imports, reigniting fears in the market.
Trump announced he would introduce significant tariffs on vehicles and auto parts at a press conference. Such measures stoked concerns of retaliatory actions from trading partners, raising the specter of an all-out trade war.
Anticipating the announcement, shares of General Motors Company (GM) fell 3.2%, and Stellantis N.V. (STLA) declined 3.6%. General Motors holds a Zacks Rank #3 (Hold). The announcement is compounded by Trump’s hints at additional tariffs next week, where he suggested some countries might receive exemptions from reciprocal tariffs.
Investor sentiment has been negatively affected by these trade war fears, with both the S&P 500 and Nasdaq previously entering correction territory this month. Wednesday marked further losses for tech stocks, including a 5.6% drop in Tesla, Inc. (TSLA), a 2.3% decline for Meta Platforms, Inc. (META), and a 2.2% decrease for Amazon.com, Inc. (AMZN).
Recent Economic Data
In economic updates released on Wednesday, the Commerce Department reported that durable goods orders increased by 0.9% in February, surpassing analysts’ forecasts of a 1% decrease.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
